Hopefully you are already aware of how vital insurance is for nomads. If you’re not quite there yet, keep an eye out for a post on that subject in the near future. This article is for individuals who are aware of their need for insurance coverage but are unsure of which type to purchase due to the competition that exists not just between different insurance firms but also between various insurance policy types.
We’ll discuss the two most important topics for global nomads in this post: travel insurance and medical insurance.
Travel insurance: What is it?
Simply put, travel insurance protects you while you’re traveling, whether it’s for a weeklong vacation or a yearlong tour around the world. While the specifics of various travel insurance policies can vary depending on the insurance provider (by “specifics” we mean what it actually covers, in particular the maximum limits you can claim for, and most importantly what it does not cover), they all share the same goal and/or selling point: They guard you against things that might go wrong while you’re traveling.
This typically means that you will have coverage for the following with travel insurance:
- Emergency medical treatment
- Delayed flights
- Lost luggage
- Theft of personal possessions
Because it is “Travel” insurance, you are typically not fully covered in your home country (often not covered at all, and if you are, there are usually strict maximum days you are covered for, and limits on what you can actually claim for), and the main goal of this type of insurance is to get you back home safely. Note that after you return home, its work is finished.
Short- to medium-term travelers should consider purchasing travel insurance. Nomads who travel frequently will find it especially helpful if they are flying with low-cost airlines in developing nations because you won’t likely receive any assistance if your flight is canceled or significantly delayed.
Travel insurance typically reimburses you for any expenses you’ve already paid that the travel insurance provider approves (keep in mind that reimbursement is not a given); as a result, you typically have to pay first, then provide receipts and other supporting documentation, and finally request that the money be sent back to you.
This is acceptable for items you have already purchased, like a camera that is stolen and can be replaced when/if you get the money back from the insurance company a few weeks later, but it implies you must be able to pay for medical care up front before you can subsequently claim the cost back.
Usually no one is available to speak with in advance to determine whether your possible claim would be covered. Not the best for medical costs!
Last but not least, if you see something offered as “Travel Medical Insurance,” remember that it is actually “Travel Insurance” with a more enticing name. Yes, we are being humorous.
Although it might also be known as “Travel Luggage Insurance,” no one does so because it wouldn’t generate as much business. If the title contains the word “Travel,” it is travel insurance, which is regulated under a completely other licensing category (general insurance as opposed to personal insurance).
Medical insurance: What is it?
Simply put, medical insurance safeguards your general health by giving you protection against medical problems and covering the cost of private medical care when necessary.
Most “local” medical insurance plans will only cover you in the country that you purchased the insurance policy in, and most “international” medical insurance plans will cover you anywhere except the USA (because the USA has a completely different healthcare system from the rest of the world, and it’s super-expensive). The coverage levels will vary depending on the insurer and the level of cover that you choose, and many have geographical limits as well.
When choosing a medical insurance coverage, it is ESSENTIALLY IMPORTANT to verify where on earth you are covered. You do not want to discover that you are not covered when you need it. Some insurance providers deliberately exclude coverage for you in situations that *they* deem to be “high risk,” even though in your judgment they may be rather low risk.
Typically, medical insurance policies will pay for any necessary treatment up to the maximum limitations of your plan, from the moment a problem arises until all necessary medical treatments have been resolved.
The finest ones (not all of them, so make sure to check) will pay the hospital directly, so you won’t have to make a payment first and then request a reimbursement later. This is crucial because in many nations, those who cannot afford treatment are not given it. Then, in addition to becoming a bigger financial concern, it also becomes a bigger health problem.
Which is more suitable for nomads?
In order to adequately respond to this question, it is crucial to understand that these two types of insurance, although some similarities, are COMPLETELY DIFFERENT types of insurance coverage and address quite different issues.
Because a delayed flight has no bearing on your health, medical insurance obviously does not reimburse you for such events. Similar to how there is nothing stopping you from boarding the next aircraft home if you are diagnosed with cancer, travel insurance, sometimes known as “Travel Medical Insurance,” does not cover you for things like cancer treatment.
If your airline informed you that your flight had been canceled, and you asked your medical insurance company to pay for a new flight, they would respond that they do not cover flights; rather, they only cover your health and any necessary medical care; and that you should make your own travel arrangements.
Similar to this, if you asked a travel insurance company to pay for a hospital operation your doctor said you would need in the near future, they would respond that they do not cover hospital operations and that they only pay for things that interfere with your travel plans. They would then advise you to stop your travels and return home to get the operation you need, then take care of it yourself.
When it comes to EMERGENCY medical care, outside of your native country—for things like breaking your arm, contracting an unknown sickness, being hit by a bus, etc.—this is where the two intersect (often the only place they do). That’s it, generally speaking. Both will offer you the crucial emergency care you require right away.
Medical insurance will pay for non-emergency medical operations including scheduled surgeries, kidney dialysis, organ transplants, and anything else that is scheduled by doctors and for which you have an appointment, but travel insurance will advise you to return home. If you return home, your medical insurance will continue to cover your medical expenses; however, since you are no longer traveling, your travel insurance is no longer necessary.
Therefore, asking “which one is best” is a bit like asking if an apple or a banana is superior. Aside from the limited number of items they share, they are not truly comparable.
Which one is best for YOU would be a better query. And the response to that will probably depend on how the following important questions are resolved:
- What do you hope to accomplish by getting insurance?
- Do you have full access to complimentary medical care at home?
- If you need ongoing medical care, would you want to be compelled to return home?
- Would you rather skip the waiting list for public healthcare and use private hospitals right away?
- If your travel insurance forced you to return “home,” and you had to wait for medical care while on a waiting list, would you have a place to live and be able to afford your living expenses both while you were waiting for care and while you were recovering from it?
- How much do the two types of insurance differ in price?
Generally speaking, travel insurance is the best option if you are traveling for a short period of time (a year or less), want to ensure that you are protected in case of an emergency while you are ONLY traveling, and want to ensure that you receive assistance to return home as soon as possible if anything goes wrong.